.gif)
BACK TO HOME
PAGE
EUROPEAN REVIEW
ISSUE 14 - Page
5
Spain: EU's biggest winner now hit by prosperity problems
We continue our series on different European
countries with a feature on a favourite British holiday destination
and growing economic power which is reaping both rewards and
difficulties from EU membership.
IF WE COMPARE THE present members of the European Union with the
same countries in 1975, probably the one that has changed the most is
Spain. At the beginning of that year, while the U.K. had recently
joined, Spain was still a dictatorship, there were no free trade
unions, higher education reached a tiny fraction of the population,
languages other than Castilian Spanish were banned and the nation was
seen as poor and backward. By the advent of the new century, the
Financial Times opined 'Few countries have turned the corner of the
millennium in such an optimistic frame of mind as Spain. The economy
has consistently been growing faster than the rest of the European
Union for the past five years. And now, as the EU's pace picks up, so
does Spain's'.
|
|
|
|
|
|
Images of the new Spain: the AVE
train (top left), the Guggenheim Museum in Bilbao
(right)
and architectural wonders in
Valencia (bottom left)
|
How did this transformation happen? The short answer is EU
funding; because Spain was both poor and populous it was the biggest
benificiary of EU schemes such as the structural fund. As late as
1999, when its growing prosperity had reduced the grant, the country
still received the most money, €7,090,700,000 net, from Brussels
and was fourth in the list of winners, taking into account the size
of their economies. However, there are other factors for which the
Spanish people and government have been responsible. Government has
been rapidly devolved to the regions, with go-ahead industrial areas
such as Catalonia and the Basque country achieving a great amount of
independence. Participation in university education has tripled since
Franco. Large infrastructure projects such as the AVE high speed
railway line from Madrid to Seville were completed. The country also
hosted the Olympics and the Expo thereby raising its profile. Foreign
investment flowed in the wake of these initiatives, making areas such
as the run-down port city of Cartagena in the south-east a new base
for companies such as General Electric, Repsol and Air Liquide.
Spanish companies such as the telecoms giant Telefónica and
the BBV bank have become players in the merger game in an atmosphere
of deregulation and privatisation. Overall the economy boomed, in the
late 1990s growth rates of over 3.5% were common and 440,000 jobs
were created in twelve months. According to Cristobal Montoro, state
secretary for the economy, 1998 was 'a truly splendid year'.
|
However as the boom has continued, inflation has
begun to rise and similar problems to that of
Ireland (see issue
10) are being encountered. Trade unions have
responded by demanding wage rises indexed to
prices. In the private sector agreements were
struck whereby 5.8 million workers received rises
if inflation was higher than government forecasts.
In the civil service public administrators had
their wages frozen by the incoming right-wing
government in 1997 but following a court case in
January 2000 where
|
|
the teaching section of the trade union
federation Comisiones Obreras, (CC.OO) won a
judgement, a strike was held in December as the
government would not back down. Employers seeking
work flexibility have also run into opposition with
longer shop hours, variable shift patterns and a
proposal to make women pay the costs of maternity
leave occasioning protests and strikes. Attitudes
towards immigrants have also become problematic
with the growth in prosperity.
|
|
Prime Minister Aznar of the
right wing PPP
|
|
Spain used to export labour and import capital. Now, in net
terms, the reverse applies. Poor migrant workers from countries such
as Morocco and Ecuador have filled the gap left by Spain's low birth
rate (the lowest in the EU) and many have no papers. Trade unions
estimate that in Murcia alone there are around 40,000 immigrants who
have not been able to regularise their situation, most of whom work
in agriculture. This situation has led to riots and the tragic death
of a group of Ecuadoreans whose overloaded van was hit by a train on
their way to illegal work. The new government has reversed many of
the provisions of a law designed to enable immigrants to be legalised
amid protests in many Spanish cities and it is not clear if
xenophobia or solidarity will rule the day.
It seems that, along with other formerly poor members, Spain is
finding that the rich man's club brings new problems as the old ones
are at last being conquered.
